In Dallas and across the country, hospitals, doctors and dealers have made Medicare the nation’s sweetest crime. The feds are now trying to shutter the door.

"The interesting thing about health-care fraud is that our government always goes after low-hanging fruit," he says. "If they were storekeepers, we'd put in surveillance systems and armed guards to catch kids stealing gum from around the cash register. Meanwhile, we have people backed up to our warehouses with semi-trailers loading the merchandise, and we're oblivious to that."

Well, not everyone is oblivious.

The Guys Who Showed Up

Gage Skidmore

Florida Governor Rick Scott was CEO of a hospital company that was nailed with two sets of books. Then he went into politics.

Housed in a featureless building north of Miami, the HEAT Task Force is a government anomaly: It actually turns a profit.

For every dollar it spends investigating, it uncovers another $8 in fraud.

From the moment you enter the office, you notice something's different. The cubicle plantation is eerily quiet. Most agents are on the street, working more than a dozen cases each.

HEAT is short for the windy governmentese of Health Care Fraud Prevention and Enforcement Action Team. It has branches in nine cities where the stealing is most prolific — places like Los Angeles, Houston, New York, Dallas and Baton Rouge. Agents and prosecutors work in small, aggressive teams, combining data analysis with traditional detective work.

Since 2007, they've charged 1,480 defendants with $4.8 billion in fraud. More than half of those indictments came out of the unit in Miami, a city Special Agent In-Charge Christopher Dennis calls "the crown jewel of Medicare fraud. A lot of the schemes are typically started here — vetted, proven here — and farmed out to other parts of the country."

There's no shortage of targets.

Agent Reginald France, a first-generation Haitian-American built like a linebacker, was out at 3 a.m. this morning raiding a medical office. His motivation comes from the guile of these crimes.

"You have some of the smartest people in law enforcement working here," he says. "In a lot of ways that drives us, because we want you to understand you can't pull the wool over our eyes."

France takes a reporter on a tour of the fraud hotbed of Hialeah. Strip malls line boulevards like concrete and metal kudzu. An agent who wishes to remain anonymous rides along, his square jaw and disarming manner reminiscent of The Rock. He offers a reporter $1 for every mall he can spot without a medical business.

It isn't easy.

There are doctors, physical therapists and mental-health clinics in every direction. Mom-and-pop pharmacies sit just doors down from Walgreens, yet still out-bill the national chain thanks to prescription fraud. Adult day care centers specialize in physical therapy for Medicare beneficiaries.

"They bring in these Zumba dancers," cracks The Rock. "These young girls are Zumba-dancing away, and these old guys are looking at it, and, yeah, they're getting some kind of therapy."

Medicare recipients are crucial to these schemes. While it's possible to simply steal patients' information, those schemes are easier to detect.

"That's the bread and butter of the fraudster — the fact he can pay somebody to participate in the scheme," Dennis says. "If you have a willing participant, you then eliminate the ability to tie the fraud to you. That person is going to lie for you because they conspired with you."

Recruiters typically pay beneficiaries a combination of cigarettes, booze, pills and money to use their Medicare numbers. Cash payments can reach $2,000 quarterly. All recipients have to do is sign sheets confirming that care was received.

For the patient, it's a low-risk play. Nobody wants to put an 80-year-old mee-maw in front of a jury. Prosecutors wouldn't recoup much even if they did. And since Medicare can't be revoked by law, there's little downside to bartering your number away for a carton of Kools.

This makes the beneficiaries key to unraveling the plots, and necessitates a careful, respectful touch. Many of The Rock's tips come by way of recipients he's encountered in previous cases.

The Rock savors breaking down liars. He asks them seemingly innocuous questions about their family and upbringing. These are typically answered in a quick, sure tempo, while questions of fraud are littered with ums, wells and false starts.

"You keep them talking, and after a while, their house of cards starts to crumble," he says. "They're looking up and noticing that I'm not writing down anymore. You give them the look — 'I'm not stupid' — the same look their mother and my mother gave us."

He's been chasing fraud for more than a decade, and he's sure to be doing it a decade from now. That's the wonderful thing about the federal government being your mark: It always has new money to steal.

Dr. Oxy and Detroit's Fraud Beach

Imagine one of Martin Scorsese's overhead tracking shots. Only instead of zooming in on his favorite goodfella, the camera zeroes in on Michigan's Monroe Pain Center, near the Toledo, Ohio, border.

It pans the surrounding strip mall, parking lots filled with license plates from Kentucky, Tennessee and even Florida. That's how far people were willing to drive for a Las Vegas Cocktail.

The cocktail mixes Xanax, Soma and Vicodin for a powerful opiate high. Monroe was its unofficial retailer. It was led by Oscar Linares, a doctor from the Dominican Republic who also worked at the University of Toledo Medical Center. Sometime in 2008, he started leading a double life.

this country makes me fucking physically ill...knocking over a liquor store and stealing $400 bucks will get you a longer term in jail then stealing 73 million dollars from taxpayers...possessing marijuana which harms no one will get you a longer term...unless you happen to be rich or influential this country will fuck you up the ass continually and never stop the raping

Many believe there are patients who scam Medicare/Medicaid. But, the real culprits tend to get away with fraud. Sometimes, they are arrested and incarcerated; however, before cuts are made to this program, the FBI needs to weed out those who are abusing the system, the physicians.

I can't help but see a distinct connection between the conservative movement's obsession with "smaller government" and abuse like this. When you shrink federal regulatory agencies to the point they're practically defunded, guess what? Many regulatory agencies simply do not possess the manpower to protect the American people from fraud. This was obvious during the 2008 downturn when the SEC was so out-gunned that even if they could have brought financial fraudsters to trial, the government is likely to face odds of 20:1 in terms of lawyers and the money to pay for them. And while Medicare itself recognizes this problem, well, there's nothing to say about this but...

They give out 5-10 grand to some political clown and then they own them

Sure you will have "water carrier" democrats but that aint where the big moneys at

"HCA also admitted fraudulently billing Medicare and other health programs by inflating the seriousness of diagnoses and to giving doctors partnerships in company hospitals as a kickback for the doctors referring patients to HCA. They filed false cost reports, fraudulently billing Medicare for home health care workers, and paid kickbacks in the sale of home health agencies and to doctors to refer patients. In addition, they gave doctors "loans" never intended to be repaid, free rent, free office furniture, and free drugs from hospital pharmacies"

It should be noted the Frists , Pere & Fils kept their heads because they found a fall guy to blame.

They bought out all these old inner city charity hospitals barely getting by and turned them into cash cows

There are several problems: the DOJ-state AG has no political will to go after the big hospital chains or other big time offenders, many of whom are prominent in their communities-Parkland -UTSW THR etc and also have staff and administraion who are political donors, and or tout their "role" as erstwhile "safety nets for the poor." These less than sterlling big hospital chains are also slated to enjoy special immune status under the ACA ACO program which will put them beyond the reach of Anti-Trust scrutiny- soon -2014. The HHS is an IT nightmare with outdated computer banks and staffers who are poorly/inadequately trained (not very competent). The individual docs in the community who are honest are under constant threat of "reign of terror" from low yielding "RACS" audits of simple mistakes with HUGE potential penalties because they are easy targets. Good article... the big fish will continue to swim away under our current system of "justice". I applaud you for naming names however.

Maybe you should read the article. The largest offenders are not physicians, --some even appear to be third party administrators of the programs themselves, put in place by the govt. administrators... If you paid the physicians 0, the program would still lose money through fraud. FYI

You ARE paying more taxes under PPACA.(device taxes, higher insurance premiums real estate taxes etc.) The problem simply is that the HHS-CMS is ill euipt or inept at dealing with losses from fraud even under the current system. Imagine what will happen when there are more enrollees. The problem is not one of government" sizing"-- it is one of administrative competence. The current CMS structure is too complex and outdated to administrate efficiently but, unfortunately for the tax payer, the administrative costs continue to rise, while payments to the providers (i.e. those actually doing the work) continue to shrink (see the David Feinwachs entry-above). The providers get 20% of the total availabe funds. If you gave the providers 0%, you would still lose money through fraud and incompetence. Sibelius is a former Gov of a mid sized state and doesn't know any more about the technical requirements of administrtion of HHS than the gov of this state--she is a politician.

There are as we speak "formes fruste" of "Fristian" kickback activity going on at large non for profit hospital chains organizing ACO's to "better serve the public" These are simply vehicles to rip off the public under the guise of healthcare "reform". The scam artists are always ahead of the government and sometimes operate under govt. sponsorship.